Today, JP Morgan Analysts have seconded Citi Opinion in a research report released just a while ago. Their valuation model suggests that there could be downside of another 5-7% before value begins to emerge. Their model suggests a 12-month forward PE multiple of 12-13x if GDP growth were to remain at 5%-6% over a two–three-year time period. Relative to peer group in EM, particularly the BRICs group, Indian equities continue to sustain a healthy premium of about 30%. Indian equities likely deserve to trade at a premium to EM for structural factors. But, we believe current valuation premia leaves no scope for expansion.

Have a look at the BSE SENSEX EPS Chart between FY2013-15 [Expectations]

For FY 2013-14, SENSEX EPS will be Rs 1309 * 12x = 15,708 [~16,000 the Target we set as the Magic Number]

With the overhang of Elections and Supreme Court not letting the Thugs in the Government to Loot the Natural Resources of India [Spectrum, Mines, Land etc] we also expect a phase of sub 5% GDP Growth for India until Sanity returns to our Dirty & Arrogant Politicians.